Insurance broker Aon Inc. (NYSE: AOC) posted an 8 percent increase first quarter profit Thursday, on strong revenue growth in its Americas division.
The Chicago-based firm said net income grew $213 million, or 66 cents a share, versus $198 million, or 57 cents a share, a year earlier. Net income from continuing operations, excluding restructuring, litigation charges and tax adjustments, was 70 cents per share.
Analysts, on average, expected Aon to make 66 cents a share, according to a poll by Thomson Financial.
Overall revenue was up 10 percent, to $2.38 billion, from $2.17 billion a year ago.
The firm said its Americas region organic revenue, excluding contingent commissions, rose 8 percent to $519 million due to strong U.S. retail and renewal book management in Latin America.
UK revenue dropped 11 percent to $156 million. The companyâ€™s Europe, Middle East and Africa division rose 3 percent to $434 million. Asia Pacific grew 8 percent to $100 million.
While Aon expanded quickly in the last decade to become one of the largest insurance brokers in the world, the acquisitions to get to that position are still costing the firm as it restructures and reorganizes in an effort to improve its profit margins.
The firm said its first quarter restructuring expense was $10 million in the first quarter compared to $33 million for the quarter a year ago. The companyâ€™s three year restructuring plan is anticipated to save the firm cumulative pretax charges of $365 million and annualized cost savings of approximately $235 million in 2007.
Management remains upbeat on its outlook.
We continue to make investments in new markets and talent that will drive future growth, said Greg Case, president and chief executive officer, Aon Corporation. Our balance sheet is strong and we repurchased $345 million of stock during the quarter, highlighting our commitment to creating long-term shareholder value and a belief in the underlying strength of Aon.
Shares of the firm rose $1.69, or 4.22 percent to close at $41.71 on the New York Stock Exchange.